TIDMQIF
RNS Number : 0234Y
Qatar Investment Fund PLC
24 February 2012
Qatar Investment Fund Plc
Interim Results for the six months ended 31 December 2011
Qatar Investment Fund Plc ('QIF' or 'the Company'), the main
market listed fund established to invest in opportunities in Qatar
and the Gulf Cooperation Council (GCC) region, announces interim
results for the six months ended 31 December 2011.
David von Simson, Chairman of the Qatar Investment Fund,
said:
"The Qatar stock exchange was a beacon of stability over the six
months, in contrast to volatility elsewhere. This reinforced its
reputation as a refuge for investors at a time of anaemic growth in
Western economies. The Qatari markets are trading at attractive
valuations, relative to its earnings growth potential and
profitability."
Highlights:
-- Qatar Exchange (QE) was the best performing market in the GCC
and Arab region for the second consecutive year. For the second
half of 2011, the Qatari market added 5% underpinning the
robustness of the Qatar economy.
-- Growth prospects of the GCC economies have generally improved
during 2011 as a result of substantial new spending commitments on
the part of regional governments.
-- Qatar's nominal GDP increased almost 40% to QR164.8bn in the
third quarter compared with the previous-year period on the back of
expanding gas output. Nominal GDP in the third quarter of 2010
stood at QR118.1bn.
-- Qatar's current account balance is projected to record a
surplus of 28% of GDP in 2011, up from 26% in 2010, reflecting
increased exports of LNG and condensates, and higher oil and gas
prices.
Financials:
-- Results for the six months ended 31st December 2011 showed a
profit after tax of US$10.5 million, equivalent to basic earnings
per share of 4.53 cents.
-- Net asset value per share at 31st December 2011 was US$1.05 (US$ 1.03 at 30th June 2011).
-- Dividend paid in October 2011 of 2.7 cents per share.
-- At the end of Q4 2011 the share price was trading at a 15.4% discount to NAV.
Holdings as of December 31st 2011
-- Qatar continues to be our favourite market on relatively
lower political risk and higher growth prospects.
-- As at 31st December 2011, the Company was invested in
eighteen companies, of which seventeen are listed in Qatar and one
in Oman.
-- Banks represent the largest single sector exposure within the
portfolio, with a weighting of 59.1% at the end of December 2011.
Qatari banks constitute an attractive proxy for the country's
strong macroeconomic outlook.
David von Simson added:
"We believe the Qatari economy is well placed to weather
economic downturns that are affecting the rest of the world, by
virtue of the long term nature of its LNG supply contracts, and
continuing high global energy costs. We believe continued growth
will be underpinned by the high level of infrastructure investment,
and increases in consumer spending power.
"QIF remains well placed to benefit from the economic growth and
expected increases to government spending on infrastructure in the
years ahead."
For further information:
Qatar Investment Fund Plc -
David von Simson
Oriel Securities - +44 (0) Panmure Gordon - +44 (0) 20
20 7710 7600 7459 3600
Joe Winkley Andrew Potts
Neil Winward
Maitland - +44 (0) 20 7379 5151
William Clutterbuck
Sam Turvey
Chairman's Statement
The Board is pleased to present your Company's interim results
for the six month period ending 31 December 2011.
Results
Results for the period under review showed a profit after tax of
US$10.5m, generated from fair value adjustments and realised gains,
and equivalent to basic earnings per share of 4.53 cents.
The Qatar index remained relatively stable over the six months,
in contrast to the considerable volatility seen in other markets,
thereby reinforcing its reputation as a refuge for investors at a
time when growth in Western economies is lacklustre.
On a net basis after expenses, and after adjusting for the
dividend distribution of US$0.027, our NAV underperformed the QE
Index by 53 basis points (0.53%). The QE Index represents a
theoretical return, which does not take account of the custody and
brokerage costs which a direct investor would have to bear, and
which are higher in this region than in more developed markets.
Wherever possible, we seek to take advantage of our negotiating
power to reduce these expenses. An example is our recent change of
custodian, described in post balance sheet events, which will
reduce our custody costs in the future.
The aim of your Board is to achieve a Total Expense Ratio of
less than 2% - a target which it continues to pursue vigorously.
This target represents a percentage of our present fund size. We
will continue to engage in share buybacks where we consider them to
be in the overall interests of shareholders, notwithstanding that
their effect may be to cause our Total Expense Ratio to be higher
than 2% of the resultingly smaller Fund.
Outlook
We believe that the Qatari economy is well placed to weather
economic downturns that are affecting the rest of the world, by
virtue of the long term nature of its LNG supply contracts, and
continuing high global energy costs. We believe this continued
growth will be underpinned by the high level of infrastructure
investment, and increases in consumer spending power.
Dividend
We aim to pay dividends from income received from investee
companies. Since Qatari companies only pay dividends once a year,
the Board will continue its policy of not declaring interim
dividends.
Related Party Transactions
Details of related party transactions are contained in the
annual report as well as being addressed in note 14 of this interim
report.
Outlook, risks and uncertainties
Geopolitical concerns arise from Iran's threat to close the
Straits of Hormuz. The Board regards a long term closure of the
Straits, the impact of which would be far reaching and by no means
confined to the region, to be an unlikely eventuality, given world
dependence on petroleum exports from the Gulf, and the stated
intention of the United States and other western powers to see
international law respected.
The Board believes that the principal risks and uncertainties
faced by the Company continue to fall in the following categories;
market risks, investment and strategy risks, accounting, legal and
regulatory risks, operational risks and financial risks.
Information on each of these is given in the Business Review
section of the Annual Report for the year ended 30 June 2011.
Post balance sheet events
As already reported via regulatory news announcements, the Board
was informed that Qatar Insurance Company S.A.Q. (our investment
adviser) had acquired Epicure Manager's Qatar Limited, the
investment manager. The Board considers this development to be
positive in terms of simplifying the structure and contractual
relationships, without in practical terms having any significant
impact on the running of the Fund.
Shareholders will also be aware that we have changed our custody
arrangements, appointing HSBC in place of Allied Irish Bank
Corporation (International) PLC. This will result in significant
ongoing savings, albeit at the price of some upfront cost
associated with unavoidable market fees associated with the
re-registration of shares held by our investment company.
.
The Board looks to the future with confidence and hopes
shareholders will profit from the increasing prosperity in the
region.
David von Simson
Chairman
23 February 2012
Director's Responsibility Statement
The Directors confirm that, to the best of their knowledge:
a) the condensed set of financial statements has been prepared
in accordance with IAS 34;
b) the interim management report and Chairman's statement
include a fair review of the information required by the Disclosure
and Transparency Rule 4.2.7R (indication of important events during
the first six months and a description of the principal risks and
uncertainties for the remaining six months of the year
respectively);
c) in accordance with Disclosure and Transparency Rule 4.2.8R
there have been no related party transactions during the six months
to 31 December 2011 and therefore nothing to report on any material
effect by such a transaction on the financial position or the
performance of the Company during that period; and there have been
no changes in this position since the last Annual Report that could
have a material effect on the financial position or performance of
the Company in the first six months of the current financial
year.
The interim financial report has not been audited by the
Company's Independent Auditor.
David von Simson
Chairman
23 February 2012
Report of the Investment Manager and the Investment Adviser
Market Overview
The crisis in Europe continues to be a drag on the global
economy, with the sovereign and banking crisis likely to lead to a
protracted problem in the euro zone. GCC markets remained under
considerable pressure throughout 2011 from news related to
exogenous factors. Most investors were only too happy to see the
back of 2011 and now look forward to 2012 with a sense of cautious
optimism that things will be brighter. GCC markets in 2011
succumbed to global and regional pressures. Political unrest that
swept across the Middle East had its ripple effects echoing in
several countries. However MENA outperformed global emerging
markets by a wide margin in 2011, in spite of political instability
in the Middle East and North Africa throughout the year.
For the second half of the year 2011, all GCC markets ended on a
lower note, barring the Qatari market that managed to inch higher,
adding 5% gains underpinning the robustness of the Qatar economy.
Qatar Exchange (QE) was the best performing market in the GCC and
Arab region for the second consecutive year. At the end of December
2011, QE's total market capitalization reached QR457bn
(US$125bn)..
On the negative side, the Bahrain Bourse posted the steepest
decline amongst its GCC peers, down by 13.3% in the second half of
the year. Abu Dhabi and Dubai markets ended as the second and third
worst performing markets in the second half of the year. In Kuwait,
the Index ended with a 6.4% decline compared to the first half of
the year. The Saudi Arabian market was the second best performing
market in the region with negative 2.4% return during the
period.
The performance of the other GCC markets is shown below:
Indices 30-Jun-11 31-Dec-11 Change
----------------- ----------- ---------- -------
Qatar (DSM) 8,361 8,779 5.0%
----------------- ----------- ---------- -------
Saudi (TASI) 6,576 6,418 -2.4%
----------------- ----------- ---------- -------
Oman (MSI) 5,916 5,695 -3.7%
----------------- ----------- ---------- -------
Kuwait (KWSE) 6,212 5,814 -6.4%
----------------- ----------- ---------- -------
Dubai (DFMGI) 1,517 1,353 -10.8%
----------------- ----------- ---------- -------
Abu Dhabi (ADI) 2,704 2,402 -11.2%
----------------- ----------- ---------- -------
Bahrain (BAX) 1,320 1,144 -13.3%
----------------- ----------- ---------- -------
Source: Bloomberg
The Investment Adviser believes that Qatar remains the most
attractive market in the GCC region. Moreover, the growth prospects
of the GCC economies as a whole have generally improved during the
course of the 2011 year as a result of substantial new spending
commitments on the part of the regional governments. Government
spending on the other hand is also likely to increase further,
which should ensure that the Gulf economies grow strongly in the
near term.
Some of the possible positives for 2012 would be the opening up
of Saudi Arabia for further foreign investment, MSCI
reclassification of UAE & Qatar and earnings surprises. Saudi
Arabia is pressing ahead with a long-awaited plan to open up its
stock market to foreigners and is expected to formalize its rules
by January 15, 2012. The country has been considering a wider
opening of its market for several years and recently, news emerged
that it plans to offer limited direct foreign ownership. Foreign
investors currently are allowed to invest in Saudi Arabian
companies only by share swap transactions via international
investment banks, who deal with local partners.
Macroeconomic Update
The rise in oil prices, combined with the increase in oil
production, has helped countries to finance increased levels of
spending without damaging their fiscal balances. For 2011, despite
the significant increase in fiscal spending, the Investment Adviser
expects the GCC countries to achieve a fiscal surplus. The GCC
economies remain well positioned by global standards to deal with
any renewed economic instability.
Qatar's GDP up 40% at QR165bn in third quarter
Qatar's nominal GDP increased almost 40% to QR164.8bn in the
third quarter compared with the previous-year period on the back of
expanding gas output. Nominal GDP in the third quarter of 2010
stood at QR118.1bn. The mining and quarrying sector, which includes
the key gas and oil portfolios, rose 57% in current prices to
QR98bn in the third quarter of this year compared with QR62.4bn in
Q3, 2010.
The increase in quarterly GDP (both year-on-year as well as
quarter-on quarter basis) has been driven mainly by expansion in
the production levels of LNG, pipeline gas, other gas-related
products and condensates, coupled with increases in hydrocarbon
prices.
The manufacturing sector grew 37% to QR16.2bn in the third
quarter compared with QR11.9bn in Q3, 2010. On a year-on-year
basis, petrochemicals, steel and fertilizers also showed buoyancy
in Q3, 2011. The construction sector accounted for QR5.36bn in the
third quarter.
Country's population grows by 4.3% to breach 1.7 million
mark
Qatar's population grew 4.3% in 2011 as compared to 2010 and
breached the 1.7 million mark by the year-end. Qatar's population
stood at little over 1.63 million on December 31, 2010. Qatar
Statistics Authority (QSA) suggests there has been an increase of a
little more than 70,300 people in 2011 over 2010. The Investment
Adviser believe that the trend is encouraging and augurs well for
local companies profitability
Consumer price inflation is expected to remain tame
Annual consumer price inflation in Qatar rose to 2.1% in
November because of a jump in food costs, reaching its highest
level since at least the beginning of 2010. With public spending
increasing, including on salaries, and credit growth on the rise,
demand pressures are likely to keep the inflation rate (excluding
rents) at a similar level in 2012. Analysts polled by Reuters in
September predicted Qatar would see average inflation of 2.7% in
2011, after deflation of 2.4% last year.
After eliminating the effect of rent, the overall index shows an
increase of 0.1% compared to CPI of October 2011, and an increase
of 5.3% when compared to the month of November 2010. Average
headline CPI inflation is projected at 4% in 2012.
The overall fiscal balance remained in surplus of 2.7% of GDP in
2010/11
Despite the sharp rise in current expenditure and lower than
budgeted transfer of investment income from public enterprises, The
current account balance is projected to record a surplus of 28% of
GDP in 2011, up from 26% in 2010, reflecting increased exports of
LNG and condensates, and higher oil and gas prices.
Qatar Exchange: Short-term government t-bills started
trading
In a significant move QE allowed trading t-bills in the exchange
with bonds and sukuk to be listed at a later stage. It is expected
that a more active debt market could in turn encourage companies to
issue more bonds. The listing of t-bills is the first step in the
launching of a secondary bonds market on the Qatar Exchange, which
is expected to boost trading interest from banks, financial
institutes as well as investors
Since May the central bank in Qatar, the world's largest natural
gas exporter, have been issuing about 2 billion riyals ($550
million) worth of T-bills monthly with maturities ranging from
three to nine months, to drain excess funds from the banking system
and help create a domestic yield curve. Qatari banks held about 8
billion riyals of T-bills at the end of September.
Qatar Exchange launch QE Venture Market
Qatar Exchange (QE) has launched the platform for the region's
first dedicated special market for small and medium sized
enterprises (SMEs). Named QE Venture Market the junior market is
expected to be operational by the end of the year. The market would
be focusing on SMEs and entrepreneurial companies. The
QFMA-regulated market will be using the same trading platform as
the main market (UTP), but separately branded. The junior market
will have 'lighter' regulation. The QE Venture Market expects the
listed companies to have a minimum operational track record of one
year compared with the main market's mandatory minimum three year
track record. In terms of capital requirement the QE Venture Market
expects to have a minimum QR5 million compared to the minimum QR40
million subscribed capitalization of the main market. In the last
few years Qatar has been trying to promote the SME sector to
diversify its economy. The Qatar Exchange new initiative should
support Qatar's vision to enhance the role of SME companies in
supporting the national economy and in contributing to the
achievement of the Qatar National Vision in 2030.
MSCI extended the review period
MSCI extended the review period for the potential
reclassification of the Qatari and UAE Indices from Frontier Market
to Emerging Market status. With respect to Qatar, foreign ownership
limits remain the major concern as the availability of shares to
international investors may be restricted at times of strong
demand. No change to the current situation was decided by the
Qatari regulators during the review period, and any change to the
status is conditional on a reasonable increase in foreign ownership
limits. The feedback from investors on the introduction of the new
DVP model in the Qatari equity market was, similarly to the UAE,
positive and the authorities are also making progress on the
potential introduction of regulations governing Securities
Borrowing and Lending (SBL) agreements and securities short
selling. MSCI's next announcement on country classification
decisions is scheduled for June 2012.
Corporate Profitability
Qatari companies continued to improve profitability during the
first nine months of 2011 reporting an aggregate net profit of QAR
27.9bn (US$7.7bn), up 22.0% y-o-y. Of the 41 listed companies 31
recorded higher profits, 9 companies reported lower profits, while
only one company incurred a loss. Aggregate Q3 2011 profits of QAR
9.9bn (US$2.7bn) represented an increase of 32.3% y-o-y and 11.6%
q-o-q.
Sector Profitability (QAR m) 9M 2010 9M 2011 % Change
------------------------------ -------- -------- ---------
Banking & Financial 9,251 11,270 21.8%
------------------------------ -------- -------- ---------
Insurance 702 700 -0.2%
------------------------------ -------- -------- ---------
Industrial 5,108 8,659 69.5%
------------------------------ -------- -------- ---------
Services 7,777 7,228 -7.1%
------------------------------ -------- -------- ---------
Total 22,838 27,857 22.0%
------------------------------ -------- -------- ---------
Source: Qatar Exchange
Banking & Financial Sector
Qatari banks reported a 21.8% growth in their 9M 2011 net
profits, reaching QAR11.3bn (US$3.1bn), compared to QAR9.3bn
(US$2.6bn) recorded a year earlier, accounting for 40.5% of the
total profit of the market. All eight banks reported growth in
their 9M 2011 results with rates ranging between 9.1% for Al-Khalij
Commercial Bank and 30.4% for Qatar National Bank.
Qatar National Bank (QNB) accounted for 48.1% of the total
profit of the sector, reporting a nine-month net profit of QAR5.4bn
(US$1.5bn) for the period ended 30 September 2011. Total loans and
advances and financing activities rose by 35.5%, while customer
deposits increased by 31.3% at the end of September from a year
earlier.
A recent IMF report points out that the banking sector remains
profitable and robust with a capital adequacy ratio of 22.3%,
average return on assets of 2.7% and non-performing loans ratio of
2.3% at end of June. Non-financial corporates are also in an
expansionary phase, with profits back at pre-crisis levels, cash
resources abundant, default rates low and refinancing conditions
relatively easy.
The Investment Adviser remains bullish on the sector as the
macroeconomic story remains intact and underpinned by massive
domestic infrastructure spending. A supportive Government and the
additional growth potential of the World Cup in 2022 should
translate into some of the strongest loan growth numbers in the GCC
region.
Insurance Sector
The Insurance sector reported an aggregate net profit of QAR700m
(US$192m) in 9M 2011, a marginal decline compared to an aggregate
net profit of QAR701.5m (US$193m) in 9M 2010. Of the five listed
insurance companies, three recorded lower earnings, while two
companies reported profit growth.
With 9M 2011 profits of QAR459.2m (US$126m) Qatar Insurance
Company (QIC), the sector heavy weight by market capitalisation,
generated around 65.6% of the sector's total net profit.
The Investment Adviser believes that insurance companies will
continue to do well in the future as strong macroeconomic growth,
underpinned by a growing population, and the recent launch of
several multi-billion dollar mega projects, should lead to an
acceleration of demand for insurance products in 2012.
Industrial Sector
With an increase of 65.9% y-o-y, industrials saw the fastest
profit growth of any quoted sector with an aggregate total profit
of QAR8.7bn (US$2.4bn) in 9M 2011 and accounting for 31.1% of the
overall market. Several factors supported this performance, in
particular higher crude oil prices and an increase in the price of
downstream petrochemical products in general.
Industries Qatar (IQ), the Gulf's second-largest chemical
producer by market value, reported a 53.9% y-o-y jump in 9M 2011
net profits to QAR6.2bn (US$1.7bn), the biggest increase published
by any Qatari company during the period and representing not only
72.1% of the sector's net profit, but also 22.4% of the total
markets' net profit.
IQ is Qatar's largest conglomerate by market capitalisation and
offers investors an indirect exposure to Qatar's gas potential
through its diverse operations in petrochemicals, fertilizers and
steel. IQ has emerged as a key player in Qatar's strategy of
diversifying into industries that leverage its competitive
advantages of inexpensive gas feedstock and cheap energy inputs.
The Investment Adviser believes that IQ will continue to deliver
superior profit growth going forward supported by attractive
long-term contract prices achieved in 2011 and further capacity
additions going forward.
Services Sector
The services sector reported a profits decline of 7.1% in 9M
2011 to QAR7.2bn (US$2.0bn), with 16 companies reporting profit
increases, while 5 larger companies recorded lower earnings.
Qatar Navigation reported the largest profit decline in the
market for the 9M 2011 period with a drop in profits of 48.4% to
QAR0.58bn (US$0.16bn) compared with profits of QAR1.1bn (US$0.30bn)
in 9M 2010. The net profitability was skewed due to a non-cash
accounting adjustment in 2010 related to the acquisition of Qatar
Shipping Company. Qatar Telecom (Q-Tel) recorded a 17.8% decline in
its 9M 2011 net profit to QAR2.0bn (US$0.55bn) compared to QAR2.4bn
(US$0.66bn) in 9M 2010. Q-Tel reported a y-o-y & q-o-q decline
of 13.0% and 15.8% respectively in Q3 2011.
Qatar Electricity & Water returned the largest absolute
increase in profits in the sector, up from QAR0.84bn (US$0.23bn) in
9M 2010 to QAR1.05bn (US$0.29bn) during the first nine months of
2011.
Country Allocation
Qatar continues to be our favourite market on relatively lower
political risk and higher growth prospects. The Qatari markets are
trading at attractive valuations, relative to its earnings growth
potential and profitability.
Embedded image removed - please refer to the Company's website
www.qatarinvestmentfund.com for a chart depicting Country
allocation as at 31 December 2011.
As at 31st December 2011, the Company was invested in eighteen
companies, of which seventeen are listed in Qatar and one in Oman.
This compares to 30th September 2011when the Company was invested
in sixteen companies in Qatar and one in Oman.
Industry allocation
Banks continues to represent the largest single sector exposure
within the portfolio, with a weighting of 59.1% at the end of
December 2011, up from 56.2% at the end of June 2011. The increase
was mainly due to the positive relative price movement of the
underlying stocks held rather than any net additions to
pre-existing positions. The Investment Adviser maintains a positive
outlook on the Qatari banking sector and believes that banks
constitute an attractive proxy for the country's strong
macroeconomic outlook. The investment case for Qatari banks is
further strengthened by a recovery in earnings due to a combination
of healthy volume growth and improved asset quality. Overall the
banking sector reported 22% y-o-y earnings growth for the first
nine months of 2011, and the investment thesis has been further
strengthened by evidence of double digit lending growth. This
positive trend is expected to continue into 2012.
Embedded image removed - please refer to the Company's website
www.qatarinvestmentfund.com for a chart depicting Industry
allocation as at 31 December 2011.
The services sector, which is broadly defined and includes
companies in telecommunications and utilities, accounts for 17.8%
of the portfolio holdings versus 19.6% at the end of first half of
2011. The Company's exposure to the real estate sector stood at
6.6% at the end of December 2011.
The industries and insurance sectors accounted for a further
12.1% and 3.4% respectively. Exposure to these sectors is mainly
through investments in Industries Qatar and Qatar Insurance Company
respectively.
Portfolio Structure
Top 5 Holdings
As at 31st December 2011, the top five investments of the
Company constituted 63.7% of NAV, up from 60.9% at the end of
September 2011.
Company Sector % of NAV
-------------------------- ------------ ---------
Qatar National Bank Banks 21.20%
-------------------------- ------------ ---------
Commercial Bank of Qatar Banks 12.00%
-------------------------- ------------ ---------
Industries Qatar Industries 11.50%
-------------------------- ------------ ---------
Rayan Bank Banks 10.30%
-------------------------- ------------ ---------
Doha Bank Banks 8.70%
-------------------------- ------------ ---------
Source: Qatar Insurance Company
Profile of Top Five Holdings (As At 31.12.11)
Qatar National Bank (21.2% of NAV)
Qatar National Bank (QNB) is a high quality proxy stock for
Qatari economic growth given its strong ties with the public sector
and access to state liquidity.QNB is a dominant state-owned
participant in the banking sector and plays an important role in
the development of the Qatari economy and in funding key
infrastructure projects. The government is strongly committed to
supporting the bank thus further enhancing its systemic importance.
The largest shareholder in QNB is the Qatar Investment Authority
(QIA), with a 50% equity stake. QNB is well positioned to reap the
benefits of the rapid expansion of domestic economy. QNB is the
largest bank in Qatar with total assets of QAR280.1bn (USD76.9bn)
as at 30 September 2011. QNB is well positioned to reap the
benefits of the rapid expansion of the domestic economy. The bank
operates a large product distribution network in Qatar consisting
of 60 branches and 200 ATMs.
Commercial Bank of Qatar (12% of NAV)
CBQ was incorporated in 1975 and since then it has been
developing its business as a full service commercial bank, offering
a broad range of corporate, retail, Islamic, and investment banking
products and services. CBQ is the second-largest commercial bank in
Qatar with total assets of QAR70.4bn (USD19.4bn) as at 30 September
2011. The bank has a regional business focus and accounted for
11.3% of aggregate banking assets in the country at end-September
2011. CBQ offers retail, corporate Islamic and investment banking
products in Qatar and through its associates also in the UAE and
Oman. CBQ has a diversified ownership profile with the Qatar
government the single largest shareholder with a 16.7% equity stake
held through the QIA. CBQ's capitalisation is strong with a Tier 1
ratio of 16.4% at 30 September 2011. Asset quality has been
improving since 2009. The NPLs ratio stood at 2.74% as at 30
September 2011, down from 3.16% as at end-2010.
Industries Qatar (11.5% of NAV)
Industries Qatar (IQ) is the largest publicly traded company in
Qatar. IQ is a holding company with interests in petrochemicals via
80% owned Qatar Petrochemical Co., fertilizers via 75% owned Qatar
Fertilizer Co., steel via 100% owned Qatar Steel Co. and fuel
additives via 50% owned Qatar Fuel Additives Co. Similar to many of
its Middle Eastern peers, IQ is one of the lowest cost producers in
the industry with operating and net margins in excess of 50-55%
compared to global peers with operating margins in the mid-teens.
The company procures its natural gas at a price range of US$1.75-
2.25/mmBtu compared to current global natural gas prices in the
range of US$5-5.5/mmBtu. With a low and largely fixed-cost
structure, any uptick in basic chemical commodity prices should
flow straight to the bottom line.
Masraf Al Rayan (10.3% of NAV)
Masraf Al Rayan, though relatively young, operates through two
branches in Qatar, and provides Sharia compliant commercial
banking, asset management, and brokerage services. The bank went
public in January 2006 and has existing associates in Pakistan that
deal in Takaful (Islamic insurance) and one associate in Saudi
Arabia that provides consumer finance. MARK was the first Sharia
compliant bank in Qatar to receive Moody's ratings of A3 and
Prime-2 in 2009. The bank's balance sheet and the calibre of its
backers underscore its ability to carry out acquisitions. Bank's
share of the Qatari market stood at 8% of loans and 36.2% share in
Islamic loans.
Doha Bank (8.7% of NAV)
Established in 1978, Doha Bank is one of the largest private
commercial banks in Qatar. The bank, which is headquartered in
Doha, is the third largest commercial bank in Qatar in terms of
total asset base. Doha Bank provides conventional banking services
in Qatar and abroad. The bank has 37 branches in Qatar.
Internationally, Doha Bank operates through three overseas branches
in the United States, the United Arab Emirates and Kuwait. It also
has representative offices in United Kingdom, Singapore, Turkey,
China, Japan, South Korea and Romania. The bank has historically
focused on 'smaller ticket' segments of Qatar's emerging private
economy, namely and increasingly SMEs/family businesses.
The chart below shows the NAV compared to the share price
Embedded image removed - please refer to the Company's website
www.qatarinvestmentfund.com for a chart depicting NAV compared to
share price.
Historic performance against the QE Index:
2011 2010 2009 2008 2007
5M
---------- ----- ------ ------ ------- ------
QIF NAV* 1.3% 29.9% 10.4% -36.4% 13.9%
---------- ----- ------ ------ ------- ------
QE Index 1.1% 24.8% 1.1% -28.8% 27.0%
---------- ----- ------ ------ ------- ------
Source: Bloomberg
*NAV is net of dividends
Outlook
The Investment Adviser believes that the outlook for the Qatari
market is particularly compelling with no significant negative
earnings surprises expected in Q4 2011 with most companies
expecting to improve on previous quarterly figures.
Qatar's successful 20-year investment programme in hydrocarbons
culminated at the end of 2011. While real hydrocarbon GDP will slow
down to less than 3% from next year due to Qatar's self-imposed
moratorium on development of new hydrocarbon projects until 2015,
large infrastructure investment and increased production in the
manufacturing sector will boost growth in real non hydrocarbon GDP,
which will accelerate to 9%. The IMF forecast the real GDP growth
rate in Qatar to be around 6% in 2012.
Qatar's economic indicators signal strong signs of growth with
surging revenues from oil & gas, strong government financing
support, diversification in non-hydrocarbon sectors, external
surpluses and the easing of deflationary pressures. The Investment
Adviser believes that due to the global economic and regional
political concerns investors have largely ignored the strong
economic fundamentals of the Qatari market and it continues to
remain undervalued, providing highly attractive investment
opportunities in the short term and medium term.
The Investment Adviser believes that Qatari companies will
deliver sustained growth in profitability as domestic fiscal policy
remains expansionary in support of the Government's US$226bn five
year National Development Strategy and that this will be of
particular benefit to non-hydrocarbon sectors. This combination of
highly visible GDP growth and dynamic earnings outlook makes Qatar
one of the most attractive investment destinations amongst the
emerging and frontier markets.
Epicure Managers Qatar Limited Qatar Insurance Company
S.A.Q.
23 February 2012 24 February 2012
Consolidated Income Statement
(Unaudited) (Unaudited)
Note For the period from For the period from
1 July 2011 to 1 July 2010 to
31 December 2011 31 December 2010
US$'000 US$'000
------------------------------------------------------------------- ----- -------------------- --------------------
Income
Interest income on cash balances 1 2
Realised gain/(loss) on sale of financial assets at fair value
through profit or loss 3,681 (1,378)
Net changes in fair value on financial assets at fair value
through profit or loss 9,690 56,445
Commission rebate income on quoted equity investments 7 37 64
Total net income 13,409 55,133
------------------------------------------------------------------- ----- -------------------- --------------------
Expenses
Investment Manager's fees 6 1,516 1,385
Audit fees 15 16
Other expenses 6 1,354 802
--------------------
Total operating expenses 2,885 2,203
------------------------------------------------------------------- ----- -------------------- --------------------
Profit before tax 10,524 52,930
Income tax expense 13 - -
------------------------------------------------------------------- ----- -------------------- --------------------
Retained profit for the period 10,524 52,930
------------------------------------------------------------------- ----- -------------------- --------------------
Basic and diluted earnings per share (cents) 10 4.53 22.67
------------------------------------------------------------------- ----- -------------------- --------------------
Consolidated Statement of Comprehensive Income
(Unaudited) (Unaudited)
For the period from For the period from
1 July 2011 to 1 July 2010 to
31 December 2011 31 December 2010
US$'000 US$'000
------------------------------------------------------ -------------------- --------------------
Profit for the period 10,524 52,930
Other comprehensive loss
Currency translation differences (15) (336)
------------------------------------------------------ -------------------- --------------------
Other comprehensive loss for the period (net of tax) (15) (336)
------------------------------------------------------ -------------------- --------------------
Total comprehensive profit for the period 10,509 52,594
------------------------------------------------------ -------------------- --------------------
Consolidated Balance Sheet
(Unaudited) (Audited)
Note At 31 December 2011 At 30 June 2011
US$'000 US$'000
------------------------------------------------------- ----- -------------------- ----------------
Financial assets at fair value through profit or loss 5 241,874 239,945
Due from broker - 297
Other receivables and prepayments 75 301
Cash and cash equivalents 8 2,648 1,199
------------------------------------------------------- ----- -------------------- ----------------
Total current assets 244,597 241,742
======================================================= ===== ==================== ================
Issued share capital 2,334 2,335
Reserves 9 241,232 238,040
Total equity 243,566 240,375
------------------------------------------------------- ----- -------------------- ----------------
Other creditors and accrued expenses 11 1,031 1,367
Total liabilities 1,031 1,367
------------------------------------------------------- ----- -------------------- ----------------
Total equity & liabilities 244,597 241,742
======================================================= ===== ==================== ================
Consolidated Statement of Changes in Equity
Share Capital Distributable reserves Retained Earnings* Other Reserves Total
(note 9)
US$'000 US$'000 US$'000 US$'000 US$'000
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Balance at 01 July 2010 2,336 238,989 (46,832) 1,120 195,613
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Total comprehensive income
for the period
Profit - - 52,930 - 52,930
Other comprehensive income
Foreign currency translation
differences - - - (336) (336)
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Total other comprehensive
expense - - - (336) (336)
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Total comprehensive
profit/(loss) for the
period - - 52,930 (336) 52,594
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Contributions by and
distributions to owners
Dividends paid * - - (5,835) - (5,835)
Shares repurchased to be
held in treasury - (30) - - (30)
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Total contributions by and
distributions to owners - (30) (5,835) - (5,865)
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Balance at 31 December 2010 2,336 238,959 263 784 242,342
----------------------------- -------------- ----------------------- ------------------- --------------- --------
* Retained earnings include realised gains and losses on the
sale of assets at fair value through profit or loss and net changes
in fair value on financial assets at fair value through profit or
loss. The level of dividend is calculated based only on a
proportion of the dividends received during the year, net of the
Company's attributable costs.
Share Capital Distributable reserves Retained Earnings* Other Reserves Total
(note 9)
US$'000 US$'000 US$'000 US$'000 US$'000
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Balance at 01 July 2011 2,335 238,592 (1,357) 805 240,375
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Total comprehensive income
for the period
Profit - - 10,524 - 10,524
Other comprehensive income
Foreign currency translation
differences - - - (15) (15)
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Total other comprehensive
expense - - - (15) (15)
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Total comprehensive
profit/(loss) for the
period - - 10,524 (15) 10,509
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Contributions by and
distributions to owners
Dividends paid* - - (6,275) - (6,275)
Shares repurchased to be
held in treasury - (1,043) - - (1,043)
Shares in treasury cancelled (1) - - 1 -
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Total contributions by and
distributions to owners (1) (1,043) (6,275) 1 (7,318)
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Balance at 31 December 2011 2,334 237,549 2,892 791 243,566
----------------------------- -------------- ----------------------- ------------------- --------------- --------
Consolidated Statement of Cash Flows
(Unaudited) (Unaudited)
Note For the period from For the period from
1 July 2011 to 1 July 2010 to
31 December 2011 31 December 2010
US$'000 US$'000
--------------------------------------------------------------- ----- -------------------- --------------------
Cash flows from operating activities
Purchase of investments (11,357) (24,498)
Proceeds from sale of investments 23,017 32,763
Interest received - 2
Operating expenses paid (2,924) (2,117)
Commission rebate 37 -
Net cash generated from operating activities 8,773 6,150
--------------------------------------------------------------- ----- -------------------- --------------------
Financing activities
Dividends paid (6,275) (5,835)
Cash used in share repurchases (1,043) (30)
Net cash used in financing activities (7,318) (5,865)
--------------------------------------------------------------- ----- -------------------- --------------------
Net increase in cash and cash equivalents 1,455 285
Effects of exchange rate changes on cash and cash equivalents (6) (697)
Cash and cash equivalents at beginning of period 1,199 2,756
--------------------------------------------------------------- ----- -------------------- --------------------
Cash and cash equivalents at end of period 8 2,648 2,344
--------------------------------------------------------------- ----- -------------------- --------------------
1 The Company
Qatar Investment Fund plc (formerly Epicure Qatar Equity
Opportunities plc) (the "Company") was incorporated and registered
in the Isle of Man under the Isle of Man Companies Acts 1931-2004
on 26 June 2007 as a public company with registered number
120108C.
Pursuant to an Admission Document dated 25 July 2007 there was
an original placing of up to 171,355,000 Ordinary Shares of 1 cent
each, with Warrants attached on the basis of 1 Warrant to every 5
Ordinary Shares. Following the placing on 31 July 2007, 171,355,000
Ordinary Shares and 34,271,000 Warrants were issued.
The Shares of the Company were admitted to trading on the AIM
market of the London Stock Exchange ("AIM") on 31 July 2007 when
dealings also commenced.
As a result of a further fund raising in December 2007, a
further 76,172,523 Ordinary Shares were issued, which were admitted
for trading on 13 December 2007.
On 4 December 2008, the share premium arising from the placing
of shares was cancelled and the amount of the share premium account
transferred to distributable reserves.
The Shares of the Company were admitted to trading on the Main
Market of the London Stock Exchange on 13 May 2011.
During the period 1 July 2011 to 31 December 2011, the Company
purchased 1,202,714 of its ordinary shares for a total value of
US$1,043,341 to be held in treasury. 41,855 shares had been
repurchased in the year ended 30 June 2011 for treasury but had
been held for over a year and were therefore cancelled in the
current financial period. The buy-backs are effected through
distributable reserves.
On 27 October 2011 the Company paid a dividend of 2.7 cents per
share (US$6,274,746).
The Company's agents and the Manager perform all significant
functions. Accordingly, the Company itself has no employees.
2 The Subsidiary
The Company has the following subsidiary company:
Country of incorporation Percentage of shares held
---------------------------------------------- -------------------------- --------------------------
Epicure Qatar Opportunities Holdings Limited British Virgin Islands 100%
---------------------------------------------- -------------------------- --------------------------
3 Significant Accounting Policies
The Interim Report of the Company for the period ending 31
December 2011 comprises the Company and its subsidiary (together
referred to as the "Group"). The accounting policies applied by the
Group in these condensed consolidated interim financial statements
are the same as those applied by the Group in its consolidated
financial statements for the year ended 30 June 2011. The interim
consolidated financial statements are unaudited.
3.1 Basis of presentation
These financial statements have been prepared in accordance with
International Financial Reporting Standard ("IFRS") IAS 34 Interim
Financial Reporting. They do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group
as at and for the year ended 30 June 2011.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires the Board of Directors to exercise its judgement in the
process of applying the Group's accounting policies. The financial
statements do not contain any critical accounting estimates
3.2 Segment reporting
The Group has one segment focusing on maximising total returns
through investing in quoted securities in Qatar and the GCC region.
No additional disclosure is included in relation to segment
reporting, as the Group's activities are limited to one business
and geographic segment.
4 Net Asset Value per Share
The net asset value per share as at 31 December 2011 is
US$1.0508 per share based on 231,793,752 ordinary shares in issue
as at that date (excluding 1,625,555 shares held in treasury), (30
June 2011: US$1.0317 based on 232,996,466 ordinary shares in issue,
excluding 464,696 shares held in treasury).
5 Investments
31 December 2011 financial assets at fair value through profit
or loss: all quoted equity securities
Security name Number US$'000
--------------------------------------------- ---------- --------
Oman Qatari Telecommunication Co (NWRS OM) 918,048 1,533
Al Meera Consumer Goods Co (MERS QD) 30,566 1,267
Barwa Real Estate (BRES QD) 1,959,213 16,078
Commercial Bank of Qatar (CBQK QD) 1,279,938 29,333
Doha Bank (DHBK QD) 1,205,614 21,012
Gulf International Services (GISS QD) 925,662 6,006
Industries Qatar (IQCD QD) 773,620 28,240
Masraf Al Rayan (MARK QD) 3,288,234 25,089
National Leasing (NLCS QD) 185,653 2,387
Qatar Electricity & Water Company (QEWS QD) 300,203 11,461
Qatar Gas Transport (QGTS QD) 223,562 1,074
Qatar Insurance (QATI QD) 387,729 8,269
Qatar Islamic Bank (QIBK QD) 733,750 16,937
Qatar National Bank (QNBK QD) 1,245,055 51,942
Qatar National Cement Co (QNCD QD) 48,775 1,479
Qatar Navigation (QNNS QD) 550,977 11,523
Qatar Telecom (QTEL QD) 211,182 8,143
Qatar United Development Co (UDCD QD) 15,000 101
--------------------------------------------- ---------- --------
241,874
--------------------------------------------- ---------- --------
6 Charges and Fees
31 December 2011 31 December 2010
US$'000 US$'000
------------------------------------------------ ----------------- -----------------
Investment Manager's fees (see below) 1,516 1,385
------------------------------------------------ ----------------- -----------------
Performance fees (see below) - -
------------------------------------------------ ----------------- -----------------
Administrator and Registrar's fees (see below) 200 213
Custodian fees (see below) 270 255
Directors' fees and expenses 196 145
Directors' insurance cover 29 20
Broker fees 57 57
Commission* 336 -
Other 266 112
------------------------------------------------ ----------------- -----------------
Other expenses 1,354 802
*these costs relate to the re-registering of stocks with
HSBC
Investment Manager's fees
Annual fees
The Investment Manager is entitled to an annual management fee
of 1.25% of the Net Asset Value of the Group calculated monthly and
payable quarterly in arrears.
Management fees for the period ended 31 December 2011 amounted
to US$1,515,882 (31 December 2010: US$1,385,425).
Performance fees
Up until 17 March 2011 the Investment Manager received a
performance fee if the following were met:
i) a high watermark was exceeded, whereby the adjusted net asset
value per Ordinary Share at the end of the relevant performance
period must have been higher than the high watermark; and
ii) a performance test must have been met where the adjusted net
asset value per Ordinary Share at the end of the relevant
performance exceeded the target net asset value per Ordinary
Share.
If the performance test described above was met and the high
watermark described was exceeded, the performance fee would be
equal to 20% of the increase in the adjusted net asset value per
ordinary share at the end of the relevant performance period above
the target net asset value per Ordinary Share multiplied in each
case by the weighted average of the number of Ordinary Shares in
issue in the performance period. For the first performance period,
the target net asset value per Ordinary Share was the Placing price
increased by the hurdle rate. For each subsequent performance
period, the target net asset value per Ordinary Share meant the net
asset value per share, adjusted for any prior year performance fees
paid, at the start of the relevant performance period as increased
by the hurdle rate of 8% pro rata per annum.
At 17 March 2011 there was no performance fee payable or
paid.
Effective from 17 March 2011, the performance fee structure is
based upon the relative performance of the Company against the
performance of the QE Index. The performance fee is payable by
reference to the increase in Adjusted Net Asset Value per Ordinary
Share in excess of the Target Net Asset Value per Ordinary Share
(Opening Net Asset Value per ordinary share adjusted by the
movement on the Qatar Exchange Index) over the course of a
Performance Period. The Net Asset Value per Ordinary Share on the
date of the passing of the Resolution (17 March 2011) has been set
as the initial reference point.
The Investment Manager is entitled to a performance fee in
respect of a Performance Period only if the Adjusted Net Asset
Value per Ordinary Share at the end of the relevant Performance
Period, after excluding dividends paid and received, exceeds the
Target Net Asset Value per Ordinary Share.
If the performance test is met, the performance fee will be an
amount equal to 15%.of the amount by which the Adjusted Net Asset
Value per Ordinary Share at the end of the relevant Performance
Period exceeds the Target Net Asset Value per Ordinary Share
multiplied by the time weighted average of the number of Ordinary
Shares in issue in the Performance Period together, if applicable,
with an amount equal to the VAT thereon.
In any Outperformance Period which follows any one or more
Underperformance Periods, the performance fee payable shall be
calculated by multiplying X minus Y by 15% (where X is the increase
in the Adjusted Net Asset Value per Ordinary Share at the end of
the relevant Outperformance Period above the Target Net Asset Value
per Ordinary Share for that Performance Period and Y is the
aggregate of the Shortfall Returns for the previous
Underperformance Periods) and multiplied by the time weighted
average of the number of Ordinary Shares in issue in the
Performance Period. If X minus Y is a negative figure, no
performance fee shall be payable.
If the Adjusted Net Asset Value per Ordinary Share at the end of
the relevant Performance Period is higher than the Target Net Asset
Value per Ordinary Share but is less than the Opening NAV, any
accrued performance fee will be withheld and shall not be payable
and will only become payable in the event that the Target Net Asset
Value per Ordinary Share and the Opening NAV is exceeded in respect
of a subsequent Performance Period. For the avoidance of doubt, in
the event that the Target Net Asset Value per Ordinary Share and
the Opening NAV is exceeded in respect of a subsequent Performance
Period, all accrued but unpaid performance fee(s) in respect of
previous Performance Periods will become due and payable.
If there has been a Shortfall Return in respect of a Performance
Period and performance fees have been accrued but withheld in
respect of one or more prior Performance Periods, the accrued but
withheld performance fees will be reduced by treating the prior
Performance Period(s) and the current Performance Period as one
Performance Period and calculating any performance fee due over
that aggregated period. For the avoidance of doubt, in the event
that the Target Net Asset Value per Ordinary Share and the Opening
NAV is exceeded in respect of a subsequent Performance Period, all
accrued but unpaid performance fee(s) in respect of previous
Performance Periods will become due and payable.
The Investment Manager will not be entitled to such part of any
performance fee to which it would otherwise be entitled if:
(i) payment of such part of any performance fee would cause the
aggregate performance fee in respect of a Performance Period,
excluding any accrued but unpaid performance fee in respect of
previous Performance Periods, to exceed 1.5% of the Net Asset Value
of the Company at the end of the relevant Performance Period (or,
in the case of the any Performance Period of less than a year, 1.5%
multiplied by the number of days in that Performance Period divided
by 365); or
(ii) payment of such part within the Performance Period would
have caused the performance test or Opening NAV not to be met.
Performance fees accrued but not paid during the period ended 31
December 2011 amounted to US$nil (31 December 2010: US$nil).
The Investment Manager is responsible for the payment of all
fees to the Investment Adviser.
The Investment Management Agreement is subject to termination,
inter alia, on 12 months' notice by either party.
Investment Management Agreement definitions
Adjusted Net at a particular time, the total of A minus B plus
Asset Value C where:
per Ordinary (i) A is the Net Asset Value per Ordinary Share at
Share that time calculated on a basis that does not recognise
any liability of the Company to the Investment Manager
in respect of any performance fee that is, or may
become, payable;
(ii) B is the sum of all dividends received by the
Company since 1 January 2011 divided by the number
of Ordinary Shares in issue at the time of each dividend;
and
(iii) C is the sum of all dividends paid by the Company
since 1 January 2011 divided by the number of Ordinary
Shares in issue at the time of each dividend;
Performance each period in respect of which the Company produces
Period audited accounts and, if different, the final period
for which the Investment Management Agreement subsists
or any shorter period where there has been an issue
of Ordinary Shares which exceeds 10% of the then
existing share capital of the Company, subject always
to the discretion of the Board. The first Performance
Period commenced on date of the passing of the Resolution
(17 March 2011)
Outperformance any Performance Period in which the Adjusted Net
Period Asset Value per Ordinary Share at the end of the
relevant Performance Period exceeds the Target Net
Asset Value per Ordinary Share
Shortfall the amount by which the Target Net Asset Value per
Return Ordinary Share exceeds the Adjusted Net Asset Value
per Ordinary Share in respect of a Performance Period
Under the terms of an option agreement dated 25 July 2007 the
Investment Manager was granted an option to acquire 1,713,550
shares at an option price of US$1.00 per share. The Investment
Manager Option Deed provides for the transfer of the options by the
Investment Manager to the Distribution Adviser and the Placing
Agent. This transfer has now taken place.
The option may be exercised by the Distribution Adviser and the
Placing Agent in whole or in part at any time before the fifth
anniversary of admission to trading on AIM.
The option was independently valued using a Black-Scholes model
giving a fair value of US$672,300 which was charged to equity as a
share issue expense.
Custodian fees
The Custodian was entitled to receive fees calculated as 7.5
basis points per annum of the net asset value of the Group between
US$0 and US$100 million and 6 basis points per annum of the net
asset value in excess of US$100 million, subject to a minimum
monthly fee of US$6,250. Subcustodian fees are also payable.
Custodian and subcustodian fees for the period ending 31
December 2011 amounted to US$269,782 (31 December 2010:
US$253,729). A new custodian was appointed with effect from 1
February 2012 as per note 15.
Administrator and Registrar fees
The Administrator is entitled to receive a fee of 15 basis
points per annum of the net asset value of the Company between US$0
and US$100 million, 12.5 basis points of the net asset value of the
Company between US$100 and US$200 million and 10 basis points of
the net asset value of the Company in excess of US$200 million,
subject to a minimum monthly fee of US$15,000, payable quarterly in
arrears.
The Administrator assists in the preparation of the financial
statements of the Group and provides general secretarial
services.
Administration fees paid for the period ending 31 December 2011
amounted to US$172,712 and US$27,306 for additional services (31
December 2010: US$186,230 and US$26,767 respectively).
7 Commission rebate
During the period the Company received 60% brokerage commission
rebates for all trades done through its Qatar brokers. This
arrangement is set to continue. For the period ended 31 December
2011 the Group received US$36,726 (2010: US$64,766).
8 Cash and Cash Equivalents
31 December 2011 30 June 2011
US$'000 US$'000
--------------------------- ----------------- -------------
Bank balances 2,648 1,199
Cash and cash equivalents 2,648 1,199
--------------------------- ----------------- -------------
9 Other Reserves
Distributable Retained Foreign Capital Other reserves Total
Reserves Earnings currency redemption
translation reserves
reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------- ----------------- ----------------- ---------------- ---------------- --------------- --------
Balance at 1
July 2011 238,592 (1,357) (7) 140 672 238,040
Foreign exchange
translation
differences - - (15) - - (15)
Retained
earnings for
period - 10,524 - - - 10,524
Dividends paid - (6,275) - - - (6,275)
Shares
repurchased
into Treasury (1,043) - - - - (1,043)
Share buy-backs - 1 - 1
----------------- ----------------- ----------------- ---------------- ---------------- --------------- --------
Balance at 31
December 2011 237,549 2,892 (22) 141 672 241,232
----------------- ----------------- ----------------- ---------------- ---------------- --------------- --------
10 Earnings per Share
Basic and diluted earnings per share are calculated by dividing
the profit attributable to equity holders of the Group by the
weighted average number of ordinary shares in issue during the
period:
31 December 2011 31 December 2010
----------------------------------------------------------------- ----------------- -----------------
Profit attributable to equity holders of the Company (US$'000) 10,524 52,930
Weighted average number of ordinary shares in issue (thousands) 232,483 233,432
----------------------------------------------------------------- ----------------- -----------------
Basic and diluted earnings per share (cents per share) 4.53 22.67
----------------------------------------------------------------- ----------------- -----------------
There is no difference between basic and diluted earnings per
share as the warrants and options are not dilutive in 2011.
11 Trade and other payables
31 December 2011 30 June 2011
US$'000 US$'000
------------------------------- ----------------- -------------
Due to broker - 70
Management fee payable 768 759
Administration fee payable 86 86
Accruals and sundry creditors 177 452
------------------------------- ----------------- -------------
1,031 1,367
------------------------------- ----------------- -------------
12 Directors' Remuneration
The maximum amount of remuneration payable to the Directors
permitted under the Articles of Association is GBP200,000 per
annum.
David von Simson as non-executive chairman is entitled to
receive an annual fee of GBP45,000.
Nick Wilson as chairman of the audit committee and in respect of
his work regarding share repurchases is entitled to receive an
annual fee of GBP42,500.
Leonard O'Brien, Paul Macdonald and Neil Benedict in their
capacity as non-executive directors receive GBP30,000 each per
annum.
The Directors are each entitled to receive reimbursement of any
expenses incurred in relation to their appointment. Total fees and
expenses paid to the Directors for the period ended 31 December
2011 amounted to US$196,411 (31 December 2010: US$144,666).
13 Taxation
Isle of Man taxation
The Company is resident for taxation purposes in the Isle of Man
by virtue of being incorporated in the Isle of Man and is
technically subject to taxation on its income but the rate of tax
is zero. The Group is required to pay an annual corporate charge of
GBP250 per annum.
The Company became registered for VAT from 1 February 2011.
Qatar taxation
It is the intention of the Directors to conduct the affairs of
the Company so that it is not considered to be either resident in
Qatar or doing business in Qatar.
Qatar does not impose withholding tax on dividend distributions
by Qatari companies to non-residents.
Capital gains made by the Company on disposal of shares in
Qatari companies will not be subject to tax in Qatar.
There is no stamp duty or equivalent tax on the transfer of
shares in Qatari companies.
13 Taxation continued
Kuwait taxation
Since 1 January 2009 dividends paid on behalf of holdings in
Kuwait are to have withholding tax deducted at 15%.
14 Related Party Transactions
Parties are considered to be related if one party has the
ability to control the other party or to exercise significant
influence over the other party in making financial or operational
decisions.
The Investment Adviser is Qatar Insurance Company S.A.Q. The
Group holds shares in Qatar Insurance Company S.A.Q. (see note 5).
It is paid fees by the Investment Manager.
The Investment Manager, Epicure Managers Qatar Limited, is a
related party by virtue of its ability to make operational
decisions for the Company and through common directors. Fees
payable to the Investment Manager are disclosed in note 6.
Leonard O'Brien is a director of the Investment Manager.
15 Post Balance Sheet Events
During the period, we renegotiated the terms of our custody
arrangements to arrive at a lower cost for the Company. This new
agreement was executed with effect from 1 February 2012, the new
custodian is HSBC who replace Anglo Irish Bank Corporation
(International) PLC.
On 27 January 2012 Qatar Insurance Company S.A.Q., the Company's
Investment Adviser, acquired 100% of the share capital of the
Company's Investment Manager, Epicure Manager's Qatar Limited. As a
result of this Paul Macdonald is no longer a related party to the
Company and is regarded as independent.
Paul Macdonald was appointed to the Audit Committee on 7
February 2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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